Latest data from the National Bureau of Statistics (NBS) has showed Nigeria’s crude oil exports which still cover a huge chunk of Nigeria’s total export of 85.6 per cent recorded an increase in the second quarter of 2019 of 16.5 percent compared to the corresponding period last year.
This implies that Nigerian economy is still reliant on crude oil for foreign exchange earnings and by extension government revenue.
According to the latest data from the state’s statistical agency, Nigeria recorded a total crude oil export of N3.9 trillion in Q2 2019 which was 16.5 percent higher than Q2 2018 and 4.40 percent higher than in Q2 2018.
Further, breakdown revealed in April 2019 Nigeria’s total crude oil export was valued at N1.3 trillion, while in May and June the country recorded N1.2 trillion and N1.2 trillion respectively.
Gbolahan Ologunro, a research analyst at Lagos-based CSL Stockbrokers said the growth recorded in Q2 2019 was driven more by environmental stability, relative peace in Niger delta and mild increase in oil production.
“No major export pipeline was shut down due to leakages or maintenances which also aided production during the period,” Ologunro told BusinessDay.
Ologunro noted that in the absence of any major shock in price or production Nigeria will likely sustain this trend of growth in the remaining quarters of this year.
Also, the value of other oil products exports which represent 9.44percent of Nigeria’s total export decreased by 21.69per cent compared to Q1 2019, and 15.9 percent compared to Q2 2018 while energy goods exported decreased in value by 12.31 percent compared to Q1, 2019 but increased by 15.15 percent when compared with Q2 2018.
How the oil and gas sector performs matters because slightly over 50 percent of revenue projections for the 2019 fiscal year is predicated on strong growth in the sector. The proposed federal government budget is anchored around revenue projections of N6.97 trillion for the 2019 fiscal year.
Nigeria oil sector has finally exited a painful recession after four consecutive negative growths. According to NBS, Nigeria’s oil sector grew by 5.15 percent quarter on quarter against -1.46 percent in Q1 2019.This is the first and biggest growth recorded since Q1 2018 were the sector recorded a GDP growth of 14.02 percent.
Adeola Martins, research analyst at Caritas Capital said the relative calmness in Nigeria’s export terminals, peace in Niger delta and increase in indigenous oil production is responsible for the improved performance.
“How can we sustain and build on this momentum is the major challenge,” Martins asked.
Nigeria’s oil and gas industry, remains it’s most lucrative and viable investment opportunities as stakeholders believe that the oil and gas sector offers consistent opportunities in solving Nigeria’s dwindling revenue.
Today, Nigeria is only capable of pumping some 2.5 million barrels of crude oil per day despite sitting on more than 40 billion barrels of proven reserves with its mid-stream and downstream infrastructure are arguably in worse shape than upstream production.
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